GreenFuel experimented with growing algae in tubes and bags at its Arizona pilot farm. While most of its competitors are sticking to these methods, GreenFuels has developed a closely-guarded greenhouse technologies which grows algae at higher yields and an automated system to harvest the crop. It will be debutting this setup at a commercial scale plant in Spain, to be complete in 2011. (Source: PetroAlgae)

Many in the alternative fuels industry agree that algae is where the mid-range future of the biodiesel industry lies. While fuels such as ethanol and cellulosic ethanol may prevail in the short term, algae is seen as the final stepping stone before full synthetic gasoline production. This value is due to algae's ability to grow rich long chain hydrocarbons. When algae is genetically engineered, it can produce large amounts of oil that is essentially diesel grade.

The big question with algae tech is not whether it will arrive, but when it will arrive. DailyTech had previously followed Cambridge, Mass. based GreenFuel Technologies' effort to bring its specially bred algae to the market. The company, founded by MIT graduates, had built a pilot farm in Arizona, previously. By growing algae in tubes, it found that algae would get optimal sun exposure. Its only problem was that it grew too much algae, blocking out light, and eventually killing part of the crop.

Now GreenFuel is taking its experience and has become the first algae company to announce a profitable business deal and the construction of a commercial scale growth facility. Spain's Aurantia, a leading alternative energy investment firm, has agreed to pay GreenFuels $92M to build a 100 hectacre (250 acre) algae farm. The farm will produce 25,000 tons of biomass yearly.

GreenFuel, which recently celebrated its 7th anniversary, already has a 100 square-meter prototype greenhouse operating at the site in Spain. GreenFuel ditched the growing tubes, opting for a top-secret tubeless proprietary growing process, one which includes automated harvesting. Thus far the company has declined to reveal the secretive workings of this new design.

It has, however, announced its intention to scale the production up quickly. It plans to have a 1,000 square-meter installation online by the end of the year. The full farm is scheduled to be completed by 2011.

The plant will take carbon dioxide emissions from the nearby Holcim cement plant near Jerez, Spain and use it to increase algae yields. This will cut down on Holcim cement plant near Jerez, Spain, almost 10 percent of the factory's output. This will help the factory meet tougher emissions standards.

The developers are in the process of selecting which strains of algae to grow. Certain strains are optimized for biodiesel production; bred to produce extra oil. Other strains produce extra nutrients like protein and make for more nutritious animal feed.

CEO Simon Upfill-Brown acknowledges that the field is full of overly optimistic visions, but insists his company is firmly grounded in reality and a series of successful trials. He states, "Some people are making clearly outrageous claims. We're at the stage where we can say we are pretty comfortable and very optimistic that we're getting all the way there in phases."

One trouble spot for the upcoming farm is falling gas prices. With gas low, it may be harder for the farm's biodiesel production to be economically competitive. This was cited as the resaon for rival Imperium Renewables' delay of its plan to launch a smaller algae farm in Hawaii.

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